Microsoft Corp. CEO Steve Ballmer announced his pending retirement Friday as the venerable company performs a system reboot at the top.
Ballmer, who succeeded founder Bill Gates in 2000, will retire within the next year, once his successor is selected, The Associated Press reports
. Until then, he'll continue to lead Microsoft through its shift to a devices and services company.
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"There is never a perfect time for this type of transition, but now is the right time," Ballmer said in a statement. "We have embarked on a new strategy with a new organization and we have an amazing Senior Leadership Team. My original thoughts on timing would have had my retirement happen in the middle of our company's transformation to a devices and services company. We need a CEO who will be here longer term for this new direction."
Investors reacted positively to the news, sending shares of the Redmond, Wash.-based company up as much as 9 percent after the markets opened. The shares came within $2 of their 52-week high on heavy volume.
The Board of Directors has appointed a special committee to guide the search. The committee is headed by John Thompson, the board's lead independent director, and includes Chairman of the Board Bill Gates, Chairman of the Audit Committee Chuck Noski and Chairman of the Compensation Committee Steve Luczo, the AP said.
"As a member of the succession planning committee, I'll work closely with the other members of the board to identify a great new CEO," Gates said in a statement. "We're fortunate to have Steve in his role until the new CEO assumes these duties."
Gates founded Microsoft in 1975 and oversaw its rise to become the leading software publisher. Its Windows operating system is prevalent across computers worldwide. He retired in 2008, and embarked on a second career as an international philanthropist.
The company has faced difficult times over the past decade. Ballmer has been criticized for failing to groom a successor, while a potential heir apparent, such as Windows head Steve Sinofsky, the AP said, left shortly after last year's debut of Windows 8.
The company was the world's most valuable when Ballmer took over, but has lost billions in market share in the past 10 years. Still, Microsoft remains extremely profitable. Dominant in the PC space, its Office productivity software remains the standard for business and personal computing. Also, its Xbox gaming system is popular.
Microsoft reorganized its management team last month
in an attempt to focus on the transition to a services company focused on making hardware and apps that work together across multiple platforms.
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